European Central Bank Banking Supervision calls for banks and EU-level capital markets supervision to underpin the Savings and Investments Union

European Central Bank Banking Supervision published a speech by Supervisory Board member Pedro Machado setting out how the Savings and Investments Union (SIU) is intended to mobilise Europe’s savings more effectively and deepen financial integration, with banks positioned as central intermediaries. He argued that progress on the SIU should be matched by integrated European Union-level supervision of capital markets so that integration does not undermine financial stability. The speech framed the SIU as a response to high household savings but low returns, heavy reliance on bank deposits and nationally segmented markets, and limited access by firms to long-term risk capital amid low cross-border investment. Machado highlighted potential benefits for banks from deeper capital markets, including greater private risk-sharing beyond bank balance sheets, improved ability to operate under capital, leverage and liquidity constraints through market-based funding and appropriate risk-transfer mechanisms, and reduced operational friction from fragmented rules. He also described banks’ role in mobilising retail investment while safeguarding against mis-selling, supporting small and medium-sized enterprises through securitisation and risk-sharing, and expanding asset management and trading activities as market infrastructures and fund distribution become more integrated. On supervision, he warned that expanding market-based finance could shift risks toward non-bank intermediaries and deepen interconnections, increasing the need for consistent oversight of cross-border activities. The speech pointed to the European Commission’s SIU strategy, including centralised supervision, and argued that supervisory convergence alone would not ensure consistent enforcement of the Single Rulebook across jurisdictions.